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Dynamic Value
 

Dynamic Value

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NDS white paper on best practices for adding value to peers, teams, and customers.

NDS white paper on best practices for adding value to peers, teams, and customers.

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    Dynamic Value Dynamic Value Document Transcript

    • Dynamic Value:The Art and Science of Providing Added Value White Paper Lars Ray Consultant, Network Data Systems
    • Dynamic Value – The Art and Science of Providing Added Value Table of ContentsThe Art and Science of Providing Added Value ............................................................................................ 0Executive Overview....................................................................................................................................... 1Applying the Equation towards the Client ..................................................................................................... 2Applying the Equation in the Organization .................................................................................................... 3Applying the Equation as an Employee ........................................................................................................ 4Connecting the Dots ...................................................................................................................................... 6About the Author ........................................................................................................................................... 7Acknowledgements ....................................................................................................................................... 7Author StatementThis document contains the views of the author and should not be considered as the views of Network Data Systems. It provides anoverall discussion of practical steps for adding value to clients, organizations, and personal careers. This White Paper reflects theauthor’s views based on his experience and knowledge of the subject matter.© 2011 Lars Ray i
    • Dynamic Value – The Art and Science of Providing Added Value© 2011 Lars Ray ii
    • Dynamic Value – The Art and Science of Providing Added ValueExecutive OverviewIn today’s business, competing on price and service offerings isn’t enough. Customers expect more forthe same dollar spent. Organizations are constantly challenged to offer more, spend less, and maintain –if not increase – its quality outputs. Likewise, employees must perform more than the basic expectationsof their role.How do companies, organizations, and employees exceed expectations and differentiate themselvesfrom others while contributing to the bottom line? We do it by understanding and actively pursuing the artand science of providing tangible true added value.The Value PropositionAs a favorite topic of executives, sales teams, career coaches and business leaders, the concept of"adding value" or “value-add” is well on its way to the graveyard of overhyped phrases. It is the oneelement of business today that often remains fluid, has multiple and contradictory meanings, and isapplied to everything from products to services, and from organizations to human capital.It also happens to be one of my favorite topics.One of the reasons adding value is so overused is because it is positioned as more of a what rather thana why or a how. In truth, value-add is in the eye of the beholder. Simply put, it is the client or customerthat determines what adds value to the service or product they are receiving, and ultimately to theirbottom line. This is not a difficult concept to understand, so why is it so often misapplied and over used?There are a couple of reasons for this. First, let’s understand value. Depending on the context in which itis used, value can be either static or dynamic. Static value is a noun and measured by a fair rate of returnand is packaged like a commodity. Static value is determined by many factors, such as supply anddemand, fair market exchange, historical significance, or world events. Dynamic value on the other hand,is a transitive verb, something to be considered or rated highly and prized. Dynamic value is subjectiveand is determined by the person or organization doing the valuing. A good example of both of theseelements in play is the television show Antiques Road Show, where people bring items to be appraised ofits financial worth by professional appraisers. While everything is reduced to a monetary static valuebased on market and collectible trends, I wouldn’t give two cents for half the stuff shown – dynamic value.This paper discusses dynamic value or true value as I call it, and how to use it as a successfuldifferentiator. By understanding and applying the simple equation Knowing Value = Adding Value, we willexplore how to develop true value and apply it for our customers, our organization, and our careers.© 2011 Lars Ray -1-
    • Dynamic Value – The Art and Science of Providing Added ValueApplying the Equation towards the ClientThe equation is just as it reads; in order to add value, one must know what the client values. As anexample of this equation applied in the business sector, Network Data Systems (NDS) has incorporatedthis equation as a part of its business strategy. As a result, NDS has built a profitable IT professionalservices business by meeting more than just their client’s needs.NDS is not a unique business in the Enterprise and Telecommunications professional servicesmarketplace. Google “IT professional services” and you’ll find there are about 452,000,000 listings. It isan employee owned IT professional services company specializing in providing consulting,implementation, and management services to clients who require help in implementing and managingtheir Enterprise networks.Operating in a business sector that is always changing as technology evolves and client demands grow,positioning the static values of service solutions is not necessarily the best tactic to use when trying tocompete in a pack of 452,000,000 potential competitors. So how does NDS set itself apart and providevalue-add for its clients in performing its services?NDS starts by being intentional in how it will perform its business and align its own operating values tothose of their clients. NDS has six core values:IntegrityPeople FirstCustomer ServiceEarn a ProfitGive Back to the CommunityThe sixth value, although not listed, is instead woven into the fabric that makes NDS what it is andunderpins how it performs its business – Relationships. NDS knows that to sustain a long-term andprofitable business, it requires a strong and healthy relationship with its clients, business partners, andemployees.Once a relationship is started with a client, NDS begins to actively understand what the client needs andtailors a solution to meet that need – the what, or static value. The value-add is delivered as NDSunderstands how it can contribute to the client’s bottom line while delivering the service, and in doing so,making sure it contributes more to the client in meeting its goals than the cost of the service it provides –the how and why.The true value is realized when the client can draw a line directly from its bottom line costs and connect itto the residual benefits it realizes, such as improved network performance and knowledge transfer to itsemployees. From a client’s perspective, elements that provide true value-add and contribute to theirbottom line over the cost of the service often takes the form of • Technical contributions outside of the client’s core business • Applied knowledge and expertise on the client’s behalf • Availability to perform when called upon • Access to resources not owned by the client • Agility to act in synch with the client • Client operational cost reduction or avoidance© 2011 Lars Ray -2-
    • Dynamic Value – The Art and Science of Providing Added ValueApplying the Equation in the OrganizationAt the core of most medium to large businesses providing professional services, such as Network DataSystems, its organizational structure will incorporate some form of Operations, Sales, Supply Chain,Administration, and HR or Recruiting. Depending on its market niche, it may also include Engineering,Field Services, Managed Services, and other support entities that compliment the customer facingelements.Each organization exists to perform one function – deliver the business. How well it performs this functiondepends on how well in synch it is with its sister organizations. To deliver the business, hundreds ofimportant little transactions or touch points occur within and between each organization. Understandingthis is important, because at each touch point, the potential for failure is as great as the potential forsuccess. Large amounts of energy and expense is used to create processes that streamline andstandardize how an organization delivers its business and ensures success.Most organizations focus only on their part of the business, and typically do not venture past the definedtouch points with other organizations within the company. Assuming an organization has a perfect recordin its performance, how can it provide value-add to the company, its customers, and its employees?While it’s not rocket science, Knowing Value = Adding Value does take an intentional effort. As thecompany promotes and executes on its uniqueness in its market segment, so too must the organizationwithin the company. If the organization is at the center of the world, then every touch point is a customer,regardless if that customer is internal or external.Along with reducing operating costs, avoiding expenditures, and performing process improvement, theorganization must sell its uniqueness. To do this effectively, it must ask the following questions: • How can our offering uniquely help others improve their efforts? How much more productive could they be? How much is our time and services worth to them? • How can our offering uniquely help them reduce costs? How much could they save in labor costs? How much could they save in overhead? • How can our offering uniquely help them improve quality? How much could they save in reworks, scrap, overtime, corrective action costs, and so forth? • How can our offering uniquely help them improve delivery performance? How much would they save in canceled orders, expediting costs, airfreight charges, and so forth? • How can our offering uniquely reduce their exposure to risk and liability? How much could they save in penalties, avoid project shut-downs, and outages?Asking these questions defines the economic value of the organizational offering to the customer. Again,the value-add is delivered as the organization understands how it can contribute to the company’s bottomline while delivering the business, and in doing so, contributes to overall customer and employeesatisfaction. .© 2011 Lars Ray -3-
    • Dynamic Value – The Art and Science of Providing Added ValueApplying the Equation as an EmployeeNow we’re getting to the best part – personalizing the art and science of adding value to your role. We’redone talking about elements of the business that are out of our individual control, such as company-clientrelationships and organizational effectiveness. Or are we?Here are some hard truths to consider: • Employees are company resources • Your skills and knowledge are company assets • Your role consumes company resourcesThese are true regardless of the role or position, and regardless of the company. However, there isanother, more positive way of seeing this too: • Employees are valuable company resources • Your skills and knowledge are valuable company assets • Your role consumes valuable company resourcesAs an employee, Knowing Value = Adding Value can help you connect the dots between you and howyou contribute to the company’s bottom line. If you can’t connect the dots, no one else will either. Youneed to map it out.Make your job more valuableIf there is a secret to succeeding at work, it is to make sure your work is highly valued. Here are four keyelements that increase your value: 1. Understand the business strategy. What does the business need? And what does the business think is important to get done right now? That stuff = “the value”. 2. Change how you work. Make sure the work you do is impacting those things. 3. Get recognized for it by connecting the dots for people. You have the responsibility to show how your work is impacting what the business cares about. You need to show how you are adding value. Don’t wait for others to figure it out or to discover how valuable you are. 4. Impact Profit. One way to specifically add value is to make the business more efficient or productive. That way you impact the bottom line. Profit is always something that is important to the business!© 2011 Lars Ray -4-
    • Dynamic Value – The Art and Science of Providing Added ValueAdd value through your performanceOf all the performance reviews I have ever received, those that make note of how I added value to theteam, department, or organization are the ones I treasure most. Providing value-added services in theperformance of your duties is what differentiates you from others. It’s not what you do that makes thecompany value you, it’s how you do it and why.Here are some key actions to take to increase your overall performance and ensure you are adding valuein your job:Be goal-oriented and outcome-focused: It is easy to slip into the day to day mode of responding to themyriad challenges and “fires” which face us all. Longer term, however, this narrow reactive focus willerode progress toward the goals that must be met by the department or organization.Practicing good time management and keeping focused on the results to be achieved will help to keepyou on track. Remember to prioritize the important measurable activities when the “urgent” ones, such asvoicemails and emails, are nagging at you. Quantifying and documenting your results will provide valuewhether you stay or go.Think profit and loss, even if it is not your primary job: Every proprietary business exists to makemoney, and every organization needs to “think” like a business in order to be financially viable and fulfillits mission. There are two ways to support a healthy bottom line: add to revenue or reduce expenses.Every employee in every organization has the potential – and the responsibility – to contribute to thebottom line in one way or the other, or both. The key is for all employees to development awareness anda desire to help the organization to run as cost effectively as possible.Take appropriate initiative: Mediocre employees do only what is minimally expected of them, and arenot motivated to go above and beyond their core job description. Employees who desire to add value totheir organization will see opportunities for improvements, and want to act on them. Of course, it isimperative that these actions are consistent with the intentions and goals of the organization. Even if youare not seeking career advancement per se, it is imperative to develop the habit of knowing what needsto be done, seeing a better way to do something, or better serving the needs of the customer. There is noroom today for the attitude of “It’s not my job” or “They don’t pay me enough to do that”.Collaborate whenever possible: Teamwork is a critical aspect of organizational success. If somethingcan be accomplished more quickly or effectively with the assistance of others, then reach out, collaborate,and make it happen. Put your ego aside, and forget the fact that someone else might share the “credit” forthe outcome. The greater reward for all will be the exceptional results that emerge from the synergy ofeffective teamwork.The value-add is delivered as you understand how what you do contributes to the overall effectiveness ofdelivering the business, and in doing so, making sure it contributes more to your customer in meetingtheir goals – the how and why.© 2011 Lars Ray -5-
    • Dynamic Value – The Art and Science of Providing Added ValueConnecting the DotsWe’ve explored what value-add is, how to add value to what is delivered, and why it’s important to addvalue at all levels of the business. Dynamic value doesn’t just happen…it must be intentional. It is achoice to start every day asking the question, “How can I add value today?”At the heart of this discussion, we talked about why were offering a service, not what the service is.By connecting the dots, we see as employees that we must actively seek out how we can add value toour roles. We need to understand the business by knowing the touch points of our organization, and howthey impact the business. More often than not, that touch point is another person, a fellow employee likeyou.There is the popular belief that the best way to lose weight is to help someone else lose weight. Thesame is true with adding value. The best way to add value to what you do is by ensuring what you do isvalue-added to your customer.This in turn provides added value to the organization, and the risk of touch point failures diminishes. Asone organization adds value to another, the cost of operations is reduced, thereby contributing toprofitability.With profitability comes the ability to provide useful products and services to the client. By intentionallyand strategically imparting value-add elements into the services, the client is able to realize the benefits,and in turn, provide value-add to its stakeholders.The value-add is delivered as each layer – employee, organization, and company – understands howthey contribute to delivering the business, and in doing so, making sure it contributes more to the client inmeeting its goals than the cost of the service it provides – the how and why.© 2011 Lars Ray -6-
    • Dynamic Value – The Art and Science of Providing Added ValueAbout the AuthorLars Ray is a contract consultant for Network Data Systems, specializing in project management for Tier1 mobility clients. Along with a successful career in the telecommunications industry, Lars holds amaster’s certificate in Crucial Conversations, and is a featured contributor in “Everyone Communicates,Few Connect” by leadership expert and author Dr. John Maxwell.AcknowledgementsCover Design: Fractal Image “HeartBurn” © Synaptic Junctions – MARS. Used by permission.© 2011 Lars Ray -7-